Leverage Fund Returns Soar with Rising Jisu Prices
[Asia Economy Reporter Song Hwajeong] Recently, as the stock market reached an all-time high and surged, the returns of leverage funds have also been soaring.
According to financial information company FnGuide on the 9th, leverage funds recorded a return of 28.2% over the past month, the highest among 43 theme funds.
The strength of leverage was also prominent in Exchange Traded Funds (ETFs). Among the top 10 ETFs by return over the past month, all except one?KBSTAR US S&P Oil Production Companies (Synthetic H), which rose 36.58%?were leverage ETFs. These included TIGER 200IT Leverage (30.94%), KODEX KRX300 Leverage (28.08%), KOSEF 200 Futures Leverage (27.35%), KINDEX Leverage (27.18%), HANARO 200 Futures Leverage (27.07%), ARIRANG 200 Futures Leverage (27%), KBSTAR KRX300 Leverage (26.98%), TIGER Leverage (26.95%), and KODEX Leverage (26.80%).
This strong performance of leverage funds and ETFs is due to the recent sharp rise in the index. The KOSPI rose 11.77% over the past month. On the 23rd of last month, the KOSPI surpassed the 2600 mark for the first time in 2 years and 10 months, setting a new all-time high, and subsequently broke the record eight more times. During the same period, the KOSDAQ also rose 8.37%, surpassing the 900 mark.
As stock prices rose significantly, profit-taking movements have also appeared. Leverage funds saw an outflow of 1.5464 trillion KRW over the past month, the largest outflow among theme funds.
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With expectations that the stock market’s strength will continue, including forecasts that the KOSPI will surpass 3000 next year, the favorable returns of leverage funds are also expected to continue. Kang Songcheol, a researcher at Shinhan Financial Investment, said, "Assuming the valuation remains the same as now and considering only the expected earnings growth one year from now, the KOSPI forecast can rise more than 15% from the current index level," forecasting the KOSPI at 3150?3200 points.
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